This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 THE HAGUE 002699 
 
SIPDIS 
 
STATE FOR AC/CB, NP/CBM, VC/CCB, L/ACV, IO/S 
SECDEF FOR OSD/ISP 
JOINT STAFF FOR DD PMA-A FOR WTC 
COMMERCE FOR BIS (GOLDMAN) 
NSC FOR JOECK 
WINPAC FOR WALTER 
 
E.O. 12958: N/A 
TAGS: PARM PREL CWC
SUBJECT: CHEMICAL WEAPONS CONVENTION (CWC) - DISCUSSIONS ON 
2005 BUDGET 
 
This is CWC-125-04. 
 
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SUMMARY 
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¶1.  (U)  It was apparent at the October 12-15 Executive 
Council that member states remain divided on the 
Director-General's budget and program proposal for 2005. 
While the differences are not great, whether on the level of 
increase or specifics in the program, it will still require 
some time and effort to reach an agreement.  The budget will 
be raised at the upcoming special EC on November 24, but 
chances for agreement there are slim.  Instead, the special 
EC likely will be the starting point for final budget 
negotiations, which will probably take place on the margins 
of the November 29-December 3 Conference of States Parties. 
End Summary. 
 
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LEVEL OF BUDGET INCREASE 
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¶2.  (U) In the run-up to the recent EC, the co-facilitators 
(Gordon Eckersley of Australia and Ian Mundell of Canada) 
held numerous consultations to allow delegations to raise 
questions and objections to the DG's proposed budget and 
program for 2005.  While the positions of various States 
Parties were not widely divergent, there remained differences 
that needed to be bridged.  Moreover, the Technical 
Secretariat (TS) had failed to provide responses to numerous 
 
SIPDIS 
questions from SPs (including the U.S.), which provided a 
justification for a continuing impasse.  Finally, and most 
importantly, the clear focus of attention for delegations at 
the EC was on the proposed technical change to allow 
conversion of the Rabta facility in Libya. 
 
¶3.  (U) However, with the CSP now looming, SPs have less 
leeway to avoid coming to grips with the budget and programme 
for 2005.  On the most important issue, the level of the 
overall budget increase, work will need to be done to bridge 
a clear gap.  In its opening statement, the U.S. expressed 
its support for the DG's proposed increase of 4.8 percent. 
From sidebar conversations and opening statements, all other 
delegations appear to want a reduction in the proposed 
overall budget increase, although they remain frustratingly 
silent about what particular level of increase they could 
support. 
 
¶4.  (U) The EU, in its opening statement, indicated their 
position is an increase significantly lower than 4.8 percent. 
 However, the French indicated in sidebar discussions there 
is not really a consensus within the EU.  Some delegations 
want a severe cut in the overall level, while others want a 
more moderate reduction.  The FRG delegation indicated the EU 
is looking for a number with a "3" in front of it.  The 
Netherlands indicated that it is pretty satisfied with the 
overall request, but has concerns over long-term 
consultancies.  Austria indicated it shared the common 
concerns expressed about the methodology for calculating 
salaries and common staff costs and other issues.  Most 
delegations informally thought that an increase of only 3.8 
percent might be acceptable, and Russia indicated that it 
agreed with the EU position. 
 
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FACILITATORS' REPORT 
------------------- 
 
¶5. (U) The Council received an oral status report from the 
co-facilitators.  Eckersley informed the EC that there were 
three main items outstanding on the draft budget: 
-- the core objectives language, which might be adjusted, 
-- the resources to be agreed upon to complete these 
objectives (e.g., the overall budget level), and 
-- the terms of the decision at CSP. 
 
¶6.  (U) The specific terms to be included in the budget 
decision that Eckersley mentioned were: 
-- RBB is an on-going process and the core and subordinate 
objectives and indicators may be adjusted in future budget 
documents, 
-- the TS should conduct an analysis of its current 
methodology for certain forecasting in the budget (i.e. 
salaries and staff costs), 
-- the relevance of the staffing levels (e.g., if the 507 
ceiling is necessary), and 
-- contingencies for unforeseen expenditures. 
 
¶7. (U) In comments from the floor, most SPs expressed 
appreciation for the first budget in an RBB format, called 
for a possible reduction in the overall requested budget 
increase, indicated concerns about the TS increase in General 
Temporary Assistance (GTA), the use of consultants, and 
salaries and staff costs. Several delegations, including the 
NAM, continue their drumbeat for an increase for 
International Cooperative Assistance (ICA) and the equal or 
balanced distribution of the budget among programs.  (Note: 
Such statements might have been made to set up the following 
possible budget trade-off: increased ICA would allow the NAM 
to support increased Article VI inspections, specifically 
DOC/PSF facilities, sought in the DG's proposed program. End 
Note.) 
 
¶8. (U) The common concerns held by most dels were 
-- salary and staff costs (Note: It may be that if the TS 
revises its estimates on the salary calculations and adjusts 
the time period used to calculate the exchange rate, the 
resulting savings might be enough to achieve a 1% reduction. 
At this time, it appears most SPs would be satisfied with 
such an outcome.  End note.) 
-- General Temporary Assistance/Temporary Assistance 
Contracts, 
-- consultancies (termination of the consultant for 
Universality), and 
-- the exchange rate used for salary increase calculations. 
 
¶9.  (U)  Most delegations were in favor of converting the 
security guard force to fixed-term posts, but within the 
existing 507 personnel ceiling.  (Mundell expressed concern 
several times over the fact that eleven of these posts would 
be going from Chapter 1 to Chapter 2 of the budget, though he 
was the only person to voice that concern.) 
 
¶10.  (U) Pakistan said it would join consensus on the budget, 
not indicating any interest in the "numbers" included in the 
request, but expressing serious concerns over the language 
for the core objectives in a budget using RBB.  It was also 
apparent in informal discussions that they did not seem very 
energized on the idea of reaching a consensus early, with 
most indicating there would probably be "a lot of activity" 
at the CSP. 
 
¶11. (U) In response to the oral report and the comments made 
from the floor, DG Pfirter responded that the TS had taken 
good notes and would do its best to provide the information 
requested.  He indicated that the best budget does not over- 
or under-estimate the resources required to fulfill the 
organizations goals.  The DG requested SPs not to cut the 
budget "too close to the bone" and then request him to find 
additional savings.  He emphasized that the decision by 
member states on the tenure policy was proving to be very 
costly for the organization. 
 
¶12. (U) The EC agreed to report language noting that several 
issues needed further work, in particular in the context of 
implementing RBB, the further consideration of the OPCW's 
objectives and further discussion of a small number of other 
specific elements and related resource requirements.  The 
report language also requests the TS to review promptly the 
parameters for making key budget estimates to assess the 
scope for effective program implementation at a funding level 
lower than initially requested. The key factors would include 
the current disbursement rate against approved budget 
allocations for 2004, recent decisions on salary levels and 
related staff benefits in the UN Common System, updated 
USD/Euro exchange-rate information, and the latest available 
outlook for local inflation and labor-market conditions. 
 
¶13. (U) (Comment:  The co-facilitators do not appear to have 
a solid game-plan on how to move ahead in the run-up to the 
CSP, and the delegation will continue to press them to move 
the process forward.  When asked informally about their plan 
of action for the upcoming weeks, neither facilitator had a 
firm course of action other than holding additional 
consultations.  They thought they would have proposed 
language on the core objectives in about three weeks.  They 
also indicated they would await the revised budget document 
from the TS, which would give them direction on how many 
additional consultations would be needed and when they would 
need to be scheduled.  End Comment.) 
 
¶14. (U) The Indian, Pakistani, and Iranian dels made 
objections to noting the Medium-Term Plan for 2005-2007 due 
to the fact that the language on the objectives used in the 
2005 draft budget were still open for discussion and both 
documents should contain the same language.  The Council 
therefore decided to further consider the Draft Medium-Term 
Plan for 2005-2007 at a meeting prior to CSP-9. 
 
¶15.  (U) Ito sends. 
SOBEL